Utility Customers in South O.C. to Get Substantial Rebate
Some residents in Orange and San Diego counties will be a little richer this summer.
San Diego Gas & Electric has announced plans to distribute $390 million in cash rebates to 1.1 million customers--an average of $260 to residential users and $870 to businesses.
The checks will be mailed during the August billing cycle to 1 million customers in San Diego County and 100,000 users in the Orange County cities of Dana Point, San Clemente, San Juan Capistrano and parts of Laguna Beach, Laguna Niguel and Mission Viejo.
The California Public Utilities Commission approved the rebate, a result of the sale of two San Diego power plants, lower energy prices and the refinancing of debt. The utility had been allowed to charge customers for bonds used to offset a rate decrease that ended last year.
SDG&E; took these measures as part of the transition from a regulated to a competitive energy marketplace. In this new environment, major utilities have shed some unprofitable assets and looked for additional ways to cut costs.
“No other electric utility that I know of has been able to refund millions of dollars to customers through restructuring,” SDG&E; President Edwin Guiles said.
Before deregulation, the state’s power plants and transmission grid were primarily controlled by the three large investor-owned utilities--Sempra Energy’s SDG&E;, Edison International’s Southern California Edison and PG&E; Corp.’s Pacific Gas & Electric.
Deregulation has opened the utilities’ territories to other retail electricity marketers and required the utilities to divest power plants.
SDG&E; customers will continue to pay an average $5.40 per month for the next eight years to pay off bonds used in the refinancing.
Customers’ base electric rates will continue to run about 5% less than before the industry restructuring. This base electric rate accounts for about 65% of every electric bill, the utility said.
Regulators also voted to allow Edison International, PG&E; and Sempra Energy to buy power on exchanges that compete with one set up by California, reversing part of the state’s 4-year-old deregulation law.
The Public Utilities Commission voted 3 to 2 to permit electricity purchases on approved exchanges and trading Web sites, such as the Automated Power Exchange based in Santa Clara.
“It will result in lower prices and make for a smoother transition,” Commissioner Richard Bilas said.
The 1996 deregulation law required that the state’s three publicly owned utilities buy and sell power through the state-run California Power Exchange.
“Until now we didn’t have the opportunity to go after 85% of the market,” said Ed Cazalet, chairman and chief executive of the Automated Power Exchange. The electronic exchange handled $266 million in power trades last year.
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Bloomberg News contributed to this report.
